 |
| Facebook user numbers are dropping for the first time in 18 years |
Facebook's owner, Meta, announced its financial results for the quarter and year ending December 31, 2021. The social media company's shares fell more than 20% after the social media company issued lower-than-expected guidance.
The company blamed Apple's privacy changes and increased competition from competitors such as TikTok. The number of Facebook's daily active users worldwide fell for the first time to 1.929 billion, from 1.930 billion in the previous quarter.
Meta said it has run into problems due to Apple's privacy changes to its operating system, which make it difficult for brands to target and measure their ads on Facebook and Instagram. She also cited macroeconomic issues such as supply chain disruptions.
The 18-year-old tech giant, also under pressure from platforms like TikTok and YouTube, expects revenue growth to slow in the next quarter as competition for user time and users turn to features like short video reels. , resulting in lower profits.
Facebook reported 2.91 billion monthly active users in the fourth quarter, a growth from the previous quarter.
The after-hours decline in Meta stocks cost $200 billion in market value, while peers Twitter and Snapchat lost another $15 billion in market capitalization.
Meta, the owner of the world's second largest digital advertising platform after Google, earlier warned that its advertising business faced significant uncertainties in the fourth quarter.
The company's chief financial officer, Dave Weiner, said the impact of Apple's privacy changes could reach about $10 billion by 2022.
Meta expects revenue of between $27 billion and $29 billion for the first quarter. Analysts expected $30.15 billion.
The company's total revenue for the fourth quarter, which came largely from advertising sales, was $33.67 billion compared to $28.07 billion a year earlier, topping analysts' estimates of $33.40 billion.
Facebook faces stiff new competition for ad revenue
“I am encouraged by the progress we have made over the past year in key growth areas such as scrolling, commerce and virtual reality,” Mark Zuckerberg said. “We will continue to invest in these and other key priorities in 2022 to build the Metaverse.
Zuckerberg pointed out that user competition is one of the factors affecting business. The short video app was called Tik Tok and highlighted Meta's commitment to young people.
For the full year of 2021, the Augmented and Virtual Reality Lab reported a net loss of $10.2 billion. This compares to a loss of $6.6 billion in the previous year. This is the first time the company has shown the field in its results.
Zuckerberg previously warned that the company's investments in the space would be eroded by as much as $10 billion in operating profit in 2021 and may not be profitable in the near future.
Revenue from virtual and augmented reality labs will be approximately $2.3 billion in 2021. The company has not released sales figures for its Quest virtual reality glasses.